Nintendo's Fils-Aime talks Wii U on eve of launch

By Troy Wolverton twolverton@mercurynews.com

Posted:
11/16/2012 05:17:41 PM PST

Updated:
11/24/2012 12:38:08 PM PST

When Nintendo introduced the Wii six years ago, the game console was met with skepticism by many in the game industry but was quickly embraced by the public. The company hopes the same thing is about to happen with the Wii U, which goes on sale Sunday.

As president of Japan-based Nintendo's American subsidiary, Reggie Fils-Aime is responsible for promoting the Wii U here. While he faced a challenge with the Wii, his job is arguably more difficult this time around.

Two of the Wii U's new features -- high-definition gaming and access to Internet content -- have long been offered on rival consoles. Analysts think that the mainstream consumers who loved the Wii have moved on to other things. And Nintendo is in a weak financial position; earlier this year, it posted its first annual loss as a public company.

Fils-Aime spoke to this newspaper about Nintendo's expectations for the Wii U, how the company plans to lure back its casual customers and why the new device isn't too late to market. His comments have been edited for length and clarity.

Q What are your expectations for the Wii U's launch?

A We've made more hardware available to retailers than we did for the original launch of Wii. We are also prepared to do faster replenishment into retail than we did for the original Wii. We see that the amounts that retailers have made available for pre-sale have largely been sold, which is very gratifying.

So we are fortunate that there is strong demand out in the marketplace, and our goal is to meet as much of that demand as possible.

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In terms of our expectations, all we've published is that we expect in this current fiscal year to sell 5.5 million units of hardware.

Q Part of what made the Wii so successful was that it attracted consumers who didn't think of themselves as gamers or who had stopped being gamers long before. Many of those consumers seem to have moved on to other things, whether to Facebook games or to mobile games. Do you expect to lure those same people back to the Wii U?

A Our target is consumers 5 to 95. We pride ourselves on being a mass market games company. We absolutely want more active players. We want more casual players. And we think we've got the offering to attract a very wide audience.

Consumers are looking for new and compelling experiences. And we believe we're delivering a vast array of new and compelling experiences with Wii U.

Q The idea of a console being more than just a game machine, but also a connected entertainment device, is something Nintendo resisted with the Wii while it was touted by Sony and Microsoft. Nintendo is now embracing that concept with the Wii U. Why the change of heart?

A We embraced video entertainment quite a long time ago when we brought Netflix (NFLX) on to the Wii platform. And if you were to talk to Reed Hastings or anyone over at Netflix, what they would talk about is the huge success that they had off of our platform. And there's quite a bit of public data out there that shows just how much utilization happened with the Wii for Netflix, versus our competitors.

Q This will be the first Nintendo game machine that the company's going to be selling at a loss at launch. How does that change the business model for Nintendo?

A The business model doesn't change dramatically. It's still to drive the install base of hardware, and then to drive a strong tie ratio with all of the other software and experiences for the consumer.

And if we're able to do that, then we will create significant profit for the company.

Q After selling like gangbusters in its first several years, the Wii has really faded in the marketplace. Given that the shortcomings of the Wii were apparent at launch -- it wasn't an HD console, it was underpowered compared with its rivals and, unlike them, it didn't offer a full suite of entertainment options -- why didn't Nintendo release the Wii U much sooner, and was it a mistake not to?

A As we sit here today, whether you look at this from a U.S. perspective or you look at it from a global perspective, the sell-through rate of Wii was faster than our competition, and the total install base for Wii is much more than our two competitors.

We began working on Wii U a number of years ago, and certainly the innovation that we're bringing is significant. And it's a complex endeavor to bring this type of innovation into the marketplace. We needed to do it the right way. We needed to make sure that it would be a strong consumer experience.

Contact Troy Wolverton at 408-840-4285. Follow him at Twitter.com/troywolv.

things to know about Reggie Fils-Aime
1. He serves on the advisory board of his alma mater, Cornell University, and makes presentations on campus.
2. You'll often find him schooling other Nintendo employees on the basketball courts near Nintendo's headquarters in Redmond, Wash.
3. Spends lots of time with his Nintendo 3DS system during his frequent flights across the country and to Japan.
4. Has accumulated 757 lives in the 3DS game "New Super Mario Bros. 2."